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tv   [untitled]    May 14, 2013 9:30pm-10:01pm PDT

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concessions. >> we've been provided with what is some new information to us today, which provides some data, which i assume you have some knowledge of, although i do understand the information was provided by the opposing bid. could you comment on this? what are your thoughts on the new information?
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>> there's a reward to clear channel, but i think we probably would have seen bids of 6, 7, 8 million dollars at most. this is i think where mr. /roz and i disagree. i think there's no way we would have gotten that ten million dollar bid if there was a [inaudible]. >> if from your perspective we
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have seen significant growth, but given -- >> our high market share numbers won't be sustained. we have a lot of people driving from san jose and oakland. i expect they will get those daytime flights in the next year and we'll see a shift from the bay area traffic that is more balanced than what it is today. >> i do see this as a difference on what's in the best interest of the city /-fp i really have /praoerpbted that mr. martin has shared as much
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information as they can. i know that you know the mar /k*et market better than we do and your explanation of oak land and san jose growing over the next few years. i'm trying to look through it right now to understand it, but i'm wondering if you could touch on one other issue as, um, they want to reduce clutter and the in your /tpaeuls add remembertizing. i know this contract reduces the number of 286 to 179. it's a significant /kapblt those digital advertising locations i wanted
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to give you an opportunity to respond. >> our rfp document made clear that we would allow digital advertising so all of the bidders assumed some additional value i >> i want to thank all the parties who have weighed in on this in the last few days. there's been a lot of activity
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here in city hall. this is not an easy decision for me because you're talking about a very difference of opinion between two individuals for which i have a lot of respect. i'll be honest with you, it's really hard to get invested in something like this when i don't necessarily think there is -- when you have two companies that are vying for a contract, it's really hard sometimes to tell them apart and i probably would feel the same way if jc had been in the other position. they're trying to win this contract and my experience is that when you try to /weupbl win a contract and
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you don't get it, you make the arguments, but it doesn't mean that there is a good or bad player here. i think you have two companies that are trying to win this bid. the question for me isn't who's better, but what's in the best interest of the city and i don't know what the answer is. i want to give some deference -- i'm not sure what the answer to the question of what the best deal is. my inclination would be not to support this, which is where i i am right now because i do have questions. i could be convinced that this is the best deal and i think there are
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strong arguments on either side as to that point. i think that mr. rose has a great deal of information that he has given us about where this fits in the largest scheme of things, not only -- one thing that i think is unfortunate about some of the things that we have seen with respect to this case and i say as someone who is inclined not to support this is the way in which people have talked about this, on the side against
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this deal. there's a letter came in that i think references things that are really not relevant here, including how we need to have competitive bidding because if you don't there might be favoritism, fraud, all kind of things. i don't know that any and all only either side of this case is against competitive bidding and i certainly have been a strong champion of competitive bidding. i think we can do this without questioning the motives of people and i have a great deal of respect for mr. martin and understand where he's coming from. and so i think it's unfortunate with that kind of language is put out there because i don't think that that's really where we are with this. i also believe as somebody who's gone back and
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forth in thinking about this, that i'm not sure if continuing this item really gets us anywhere. i -- again, i understand that there's a difference of opinion here, but data for a shorter period of time may or may not shed light on what actually will end up getting paid by clear channel here. you may extrapolate that that leads you to this amount, bulge there may be fluctuations within a given year, so i'm not sure we gain anything by a /kopblt continuance and i don't have any reason to doubt the voracity of the numbers, but i think there's a legitimate difference of
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opinion here, but i say vote yes or no. enough has been discussed and clear channel or jc need to know where we are. >> supervisor wean /erp. winer. wiener. >> so when this first came up, i struggled with this. and initially i had a concern about other contractual relationships with clear channel around or bus stations and news racks and i've had numerous frustrations with those contracts. we have way too much clear channel
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stuff on our sidewalks so i had concerns about clear channel as a i voted against the most
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recent [inaudible] can't actually see much outside of the bus. i voted against the billboard contract at the plan department building at mission. i don't support all adds on public property, but i'm not against it. i think that in this situation this is the right contract for the airport. so i make my own decisions, but with that said, i also know that mr. martin has
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done an extraordinary job over decades in keeping the airport on track, keeping it financially strong. while there's always controversy, the lack of drama at the airport because it is so well run is pretty extraordinary. and i know why, in terms of whether we second guess mr. martin and the airport administration's business judge judgment, i don't know why the airport administration would have /eupbl acceptabletive to leave money on the table. so i see both side of this argument in terms of the financial merits of the contract, but i do believe that mr. mar tin are making a legitimate decision.
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we would see less square footages. grant eded in terms of a continuance when it was pointed out to me earlier today that there was new information, i cometed committed that i would keep an open mind. i don't think it rises to the level of supporting a continuance. i think it's appropriate for us to vote on this today and i will be supporting the contract. >> supervisor kim. >> i am glad we're spending a
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lot of time differentiate ing ing between the person and the issue. when things come from the airport they're often highly recommended. i had a couple of questions. looking at some of the big jumps in revenue, one of the biggest jumps was when we opened terminal two in 2011, but despite that growth, there had been a steady level of growth from year one all the way to year 12. and so i'm curious to what some of your projection, are and what you thought would have been the highest growth over the past eight years. i imagine there's still a level
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that we expect to see grow in that arena. >> i'm glad you asked me that question. we reached a peek passenger level in 1999 and then we started falling. we had the first dot come crash in 9-1-1, bankruptcy, we dropped from 41 million to [inaudible] in 2002. i knew in 2001 and '02 we could only go up. i would have said our /trepbld trend has to be up. we had slow growth 2002 to 2007 and then when virgin america started things really took off. we became the competitive hot
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spot and or traffic started booming. in 2010, '11 we were one of the fastest growing airports in the u.s.. >> how many passengers are we serving currently? >> 44 million. >> i heard in might be plans for either terminal three or one. is that something we're considering? >> we're doing further improvements throughout terminal 3. i think that the big growth in revenue there in the year the [inaudible] opened
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was more because of our strong passenger growth. >> the capacity of that was increased there. >> i think the renovation probably made a difference, but the growth in passengers probably made the most difference in the ability to sell advertising. i couldn't have predicted virgin america, but i knew in 2001 my low cost carrier market share was about 4 percent, nationally it was
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about 20 percent. so i knew it was way lower than it should be and i knew it could only improve over too many. >> i think that's my questions that we could generate in terms of advertising. i believe if we smoothed out an eight year period, whether we would get around 80 million or more than 80 million, it we would have had a lower mag submitted if we had introduced or coupled it with percentage of gross revenue so i'm not sure if the actual outcome would have been relevant. i think i have a larger broad
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>> we're not going to add any gates. if we do work in boarding area b and badly /tphaodz to be replaced so we're going to replace boarding area b. so what we really want to see is growth on the international side. we can get
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a lot more passengers per flight in an international flight. and we want to see very limited growth on the domestic side, with most of the domestic growth occurring in san jose. we want to keep people off the freeways to have to get a good fair for domestic flights. >> i wanted to address an issue that even though economic situation might be improving in the city or region, it doesn't translate into growth at the airport. the airport is at capacity so for me i am supportive of the contract and the decision that the department head has made in
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terms of [inaudible] general fund -- 15 percent of the revenues. regardless of whether what we're operating on,
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listen to the arguments from mr. martin and so i was able to have a meeting with him this week -- was it this week? and to ask questions, many of the questions that my colleagues have been asking today, i asked him in the meeting and i was -- i realized this is not an issue whether we should have an airport advertisement lease, this is not a question of who's a better contract or vendor in this. and it was really about is this going to generate the most revenue for us or not. we get a percentage of it in our general fund and the fact that the number of ads that will be
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reduced by significantly above 30, 35 percent, really just the questions about cluttering. so after listening to both people that i respect a lot and realizing that when i crunched the numbers in my head in terms of what's the max and so to the, that it may be a possibility that having a percentage you may earn a little bit more revenues on this. at the same time, this is gambling. you can also be reduced to -- if something happens in the economy and so forth, but i think we're not talking about being that far off, whether it goes up and down. and in this case i -- after hearing the arguments by mr. martin, i am inclined to support the contract and i will not be supporting a
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continuance. >> supervisor cohen. >> thank you very much. like many members you heard speak today, i too waffled back and forth on this item and john martin, i've always enjoyed working with you and your staff. i have to say the deliberation on this item -- i deliberated for a while. i didn't understand why this contract is being treated so differently than other contractings and you've answered those questions. thank you. but in my conversations with the airport staff, i've also decided to support this item, largely
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because we need a different advertising structure. additionally, as i mentioned before, i believe that mr. martin -- that if we were to require both a ten million dollar minimum annual guarantee and percentage of revenue, that we will receive the [inaudible] that we did and the /pwaeuls base minimum will be less. i'm happy to see there's so much discussion about this and that we are committed to ensuring that we are not leaving any money only table or supervisor avalos might argue that we are leaving money on the table, but we are getting money off. >> thank you. i won't continue to belabor the point, but i want to make sure i
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associate myself with supervisor mar and wiener in regards to mr. martin who has been doing his job for 18 years. i had concerns when this was first presented to me, especially because i didn't understand why are we doing things differently and meetly my eyes were looking at companies and not the airport. and the airport put this out this way to do something different and when i asked why and other airports don't do it that way and he said, we set the trends, we don't follow them. and i think that's what san francisco does. i want to not necessarily do i agree with the department heads, but i respect the work of mr. martin enough to look to him to his
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judgment on how this decision was made and provide him with the support necessary to move this forward. so i won't be supporting the continuance, but i will be supporting this in moving this forward. i think we may want to take a gamble on percentage versus a guaranteed amount. i want to make sure that we are exercising good judgment in supporting a department head and his knowledge and his institutional knowledge in terms of analyzing and taking apart a contract. i plan to support this and i hope we're able to move this forward today. >> supervisor avalos.